Trust is the corner stone of the Not for Profit (NFP) and charities sector. If it’s diminished in any way that will, inevitably, have a negative impact on fund-raising levels amongst the public and possibly impact grant allocation from statutory bodies. So it’s crucial that bodies within the sector do all they can to proactively ensure it exists.
But as Aedín Morkan, Director at Mazars - the leading professional services firm specialising in audit and assurance, consultancy, corporate finance and tax – explains there are still many entities in the NFP and charities sector which will only take those proactive steps when it becomes a legal requirement.
She told the Sunday Business Post: “Some charities are making great efforts and investing significant time and resource to win back public confidence and to re-build trust in the sector however only a minority are taking all necessary steps. Many are taking a ‘wait and see’ approach and they will wait until the Charity Regulator prescribes mandatory accounting, financial reporting and governance requirements before they undertake any changes.”
Morkan explained that the short-term pain will be worth it in the interests of the long-term for the individual organisations and the wider sector.
She said: “With all of the scandals in the sector in recent years and the consequent media focus, funders, donors and the general public are exercising far more caution about where to make their charitable donations. They are doing their homework which is based largely on information in the public domain. Those charities which are open and transparent about their finances and their governance structures, through the annual report, the annual financial statements and their website, and who invest the time and effort in putting themselves forward for initiatives such as The Good Governance Awards, will be far more successful in winning public trust and confidence and hence in raising funds.”
Indeed Mazars supports the annual Good Governance Awards which recognises and encourages compliance and adherence with good governance and best practice by NFPs in Ireland.
With a long history of working with charities and not for profits both in Ireland and internationally Mazars has developed a deep understanding of the sector and its challenges. It has also developed an expert team of advisers who are not just technical experts in their given fields but are all passionate about the sector.
While Aedín Morkan believes the Governance Code for Community, Voluntary and Charitable Organisations is an excellent resource for charities she points out that it is entirely voluntary and so many bodies may choose not to engage.
“There is no independent oversight of the implementation of the Code. The first edition of the Code was published in 2012 and, to date, just 409 charities are stated to be fully compliant while a further 1,142 are ‘on the journey’,” she said, adding: “To my mind that’s a very small proportion when you consider the entire population of charities and NFPs operating in Ireland.”
And in uncertain times Aedín Morkan has urged NFPs and charities to plan for the possible effects of Brexit.
“Not unlike the advice we would give to the private sector in respect of Brexit, the key during this period of uncertainty is to plan for the possible effects as early as possible. Try to identify now what the impacts are likely to be for your organisation and put in a place a well thought out plan for those,” she said.
But she added: “It’s not all negative and I believe that charities and not for profits should be planning for the opportunities which will come from Brexit and positioning themselves now to avail of those opportunities. The EU funding tap is likely to be turned off in the UK which creates an opportunity for Irish charities and not for profits to avail of such funding. Equally there has been much discussion of an inflow of foreign direct investment to Ireland as multinationals seek to relocate out of the UK. This brings further opportunity to Irish charities and NFPs in terms of corporate fundraising and individual fundraising. While there is also the possibility of UK or Northern Irish charities relocating here which may bring competition this will also bring expertise, fresh perspective and new ideas.”
For more information please contact Aedín Morkan firstname.lastname@example.org
This article first appeared in the Sunday Business Post 25th June 2017.